Willdale sales volumes in 5 months to Feb grow 10%

Published: 19 March 2020

Willdale says sales volumes in the five months to February are 10% above prior year while profitability in the period has grown above the inflation rate due to an effective pricing mechanism and cost containment measures.

Chief executive Nyasha Matonda told the AGM this morning that a large finished carry over stock from last year had given them a competitive advantage during the rainy season but the operating environment had been weighed down by high inflation and currency instability.

"The inflation and unstable currency has the effect of diminishing disposable incomes thereby affecting the individual home development cluster of our market, besides increasing the cost of production."

The company expects to surpass production targets for the year subject to availability of adequate electric power, fuel and imported spares and materials.

In pursuit of the target, Matonda said the company had begun commissioning various sections of the plant as the annual shutdown maintenance programme reaches completion.

"We continue to leverage on available cash resources to forward purchase critical raw materials and spares in order to maintain high production efficiencies and boost competitiveness."

In terms of the market, the company had continued to receive inquiries for infrastructure projects, some of which had commenced in Matabeleland North, cluster housing development and university dwellings expansion in Harare and Midlands.

The company is hopeful that the national housing backlog currently at 1.3 million and the infrastructure gap will see increased production and sale of bricks. Matonda is confident that Willdale has capacity to meet forecast demand.

The plant currently produces 30 000 bricks an hour.

Suitable improvements had been made to the plant and more will be undertaken subject to availability of funding including foreign currency.

Focus going forward is on cost management and optimal pricing to protect margins in the face of rising inflation.

At the AGM, directors' fees were approved at $674 836 and auditors' fees were okayed at $1.38 million. A special dispensation had been obtained from the Zimbabwe Stock Exchange to extend the auditors (EY) term till the next AGM even though the 10-year engagement period had lapsed. - finx